Europe’s economic cooling is weighing on euro-zone demand for Central European-made goods, and industrial output readings throughout the region confirm that no tangible recovery is on the horizon.

On Tuesday, export-reliant Hungary reported its industrial output in November plunged a worse-than-expected 6.9% from a year earlier, working-day adjusted, compared with a milder 1.7% contraction in October. It was the biggest monthly decline since November 2009.

Advertisement

The bleak data came on the heels of a bigger-than-expected contraction in the Czech Republic’s industrial output in November, as reported Monday, which led to the koruna falling to its weakest level against the euro in two months.

The Czech economy has been contracting steadily since late 2011, while Hungary had three consecutive quarters of economic contraction last year.

While further contractions aren’t expected to last long this year, central banks in both countries have only modest hopes for economic growth and say stagnation is likely.

OTHER NEWS

POLAND: Poland’s finance ministry Monday sold 600 million zlotys ($190 million) worth of 20-week treasury bills at a top-up auction, all of the papers on offer, it said in a statement.

It saw demand at PLN1.33 billion for the bills. Earlier in the day, it sold PLN3 billion of the bills, also amid a strong demand.

CZECH REPUBLIC: The Czech koruna led declines among emerging-market currencies Monday, on the back of poor economic data and broader concerns about the future of the Federal Reserve’s stimulus program.

The koruna continued its four-day losing streak, falling to a seven-week low against the euro after economic data indicated that the recession-ridden Czech economy remains under pressure.

CZECH REPUBLIC: Assicurazioni Generali SpA is planning to buy out the 49% stake it doesn’t own in joint venture Generali PPF Holding NV in two stages, a person familiar with the matter said Monday.

“Generali is likely to initially buy a stake of around 25% from PPF in the near future and then the rest at a later stage, most likely in 2014,” the person said.

Generali declined to comment. The person said the insurer held an extraordinary board meeting to decide on the plan Monday in Milan.

Generali owns 51% of the joint venture, while the remaining 49% belongs to Czech company PPF, controlled by businessman Peter Kellner.

HUNGARY: Hungary will launch a new series of three- and five-year government bonds at its first bond auction this year on Jan. 10, and it will reopen an old bond in the 10-year segment, the government’s Debt Management Agency said Monday.

The 10-year bond on offer was last sold in November 2010, although since then it has been sold at bond switch auctions, which are cash neutral and aim at lengthening a country’s maturity profile.

About Emerging Europe

Emerging Europe Real Time provides sharp analysis and insight into what’s making news in Central and Eastern Europe. Drawing on the expertise of our reporters in the Czech Republic, Hungary, Poland, Russia and Turkey, the site provides an inside track on economics, politics and business in this emerging part of the European continent.